Joint Tenancy Vs Tenancy in Common - What Option is Right For You?

Buying a property can be one of the most exciting and poignant times of your life. To ensure that the transaction is successful, buyers should be confident that they understand the sometimes complex conveyancing terminology that might be used. This article helps to explain the difference between a ‘joint tenancy' and ‘tenancy in common'. This will enable house purchasers to confidently buy property safe in the knowledge that their estate and interests are protected and that their investment is secure and considered from the outset.

Joint Tenancy

If a property is purchased and held by two or more people in a ‘joint tenancy', it means that when one person dies, the property is automatically transferred to the survivor or survivors. As such, the deceased person's share of the property can not be inherited by anyone other than those in the joint tenancy, and so a will cannot stipulate other beneficiaries. To further the point, even children or spouses cannot benefit from an interest in the deceased's share of the property as it legally passes to those in the joint tenancy, irrespective of their relationship to the deceased.

The joint tenancy also means that once the property is sold, any remaining debts or profits are shared equally between those in the joint tenancy. It is important to note that even if one tenant pays more towards the sale of the property, they are unlikely to receive a higher proportion of profits or smaller liability of debts. However, a divorce between two joint tenants may be more complex and as such, the profits of a sale may not be distributed equally. A divorce solicitor would guide their client through this and detail whether an equal division applies or whether one party will receive a higher share due to divorce laws.

Tenancy in Common

Properties that are held on a basis of ‘tenancy in common' work differently to a joint tenancy arrangement. The main difference with this form of purchase is that if one of the tenants dies, the surviving tenants do not automatically inherit their share of the property. Furthermore, the tenants can arrange to hold the property in unequal shares, often based on their level of original investment into the purchase. Upon the sale of the property, the surviving tenants are obliged to pay the deceased's share of profits to the estate. For this reason, couples who invest a greater share into the original purchase of a property will often choose this method of purchase to protect their investment, particularly if a future marriage is unlikely.

Often, couples who have children from previous relationships will choose this method of purchase to ensure that their children can still benefit from an interest in the property upon the death of their parent. It is wise to support this wish by making a will to specify that your share of the property should be inherited by those who you specify. Otherwise, the rules of intestacy may overrule your wishes.

The transfer of deeds document should specify how the shares of the property are split and if the division is unequal, it is wise to note the specifics on the split in a declaration of trust.

How Should I decide whether Joint Tenancy or Tenancy in Common is best for me?

In some instances, it may be obvious which form of purchase type is best for you. For example, couples who are unmarried or who have children from a previous relation might prefer to opt for tenancy in common to ensure that their estate can be inherited by those who they specify in a will.

On the other hand, many married couples will opt for a joint tenancy as they see no benefit to the alternative. That said, a solicitor will help all clients to determine which option is most suitable for them and how to specify their wishes using the tenancy options alongside their wills. This may be especially appropriate for elderly couples who recognise that leaving shares of a property to the survivor who is late in years could cause complications in the future. This would be particularly prevalent if the surviving spouse had to move into a care home at a later date for example.

A solicitor will also assist business clients in their purchase options. Some business partners may buy property together and want the surviving partner to obtain an automatic transfer of their share of the property in the event of their death. On the other hand, some business partners may purchase property as an investment or to increase their assets and may prefer to stipulate who inherits their share in the event of death.

Can I change my mind about whether to hold a property in joint tenancy or tenancy in common after the purchase has been completed?

It is entirely possible to revise the tenancy arrangement once the purchase of a property has been completed. This is reflective of people's need to amend their affairs as changes in life occur. For example, an unmarried couple who had purchased their home on a joint tenancy basis may then marry and amend their holding to tenancy in common. In order to make amendments, all tenants must agree to the changes.

To make a purchase confidently and to suit your specific needs ideally, it is wise to obtain the advice of a conveyancing solicitor. The solicitor will be able to help you assess the best option for your needs and help you to consider the implications of both choices.

Did you find this guide helpful?1

Conveyancing & Property Law Guides

A Guide to Energy Performance Certificates

An Energy Performance Certificate (EPC) provides information on the usage of energy in a home or business premises. The certificate provides buyers with useful information on the usage and costs of energy...

A Guide to Emergency Housing from the Council

If you become legally homeless, your council is obliged to help you. The amount of help that you receive will depend on your eligibility, whether you are homeless through your own fault and your personal...

Buying a House - A Guide to the Conveyancing Process for Buyers

Conveyancing is the legal term given for the process of buying and selling a property. Conveyancing is a notoriously complicated area and so a solicitor is imperative to ensure a successful and faultless...

Accelerated Possession Orders

If you are a landlord and want your tenants to vacate the property, there are strict criteria that you will need to abide by. Failing to do this can mean you are guilty of illegally evicting your tenants....

You might be interested in these questions

I have received the following from a developer who sold me the cottage in 2011, which should have been made clear to me at the time - hence the email below. "The developer of the estate would be very grateful if you could help with completing a drainage easement required by Cornwall Highways in connection with the final section of road adoption under...

Hello. How long are lawyers and their law firms obliged to keep e-mails and bank statements relating to their client activities? I'm investigating a very suspicious-looking freehold purchase of a block of flats where a solicitor may have defrauded 20+ clients in one go. I've been requesting the documents from the lawyer 6 times over a 9 month period...

Find a solicitor

Use our find a solicitor service to find and compare the best Conveyancing & Property solicitors from around the UK. Narrow your search down to a particular town or county to find local solicitors that practice Conveyancing & Property law.